Rate reviews cost insurers $500M in premiums

The New York insurance department has slashed insurers' premium rate requests so much that it will save consumers $500 million this year.

Insurers sought rate hikes averaging more than 12 percent, but the Department of Financial Services cut down those increases to 7.5 percent, limiting the average approved rate to less than 10 percent, reported the Rochester Democrat and Chronicle.

"We have made progress in holding back rates, but we recognize that much more needs to be done," Gov. Andrew Cuomo said in a statement. He added that his administration is "firmly committed" to making health insurance affordable by identifying ways to "restrain the rising cost of healthcare services."

The department was able to hold down costs for about 2.3 million customers, mostly in small groups, HMOs, individual plans and Medicare Supplement policies, because of New York's 2010 "prior approval" law authorizing rate reviews, The Daily Star reported.

The largest rate adjustment went to Group Health Inc., which is owned by EmblemHealth. It saw its proposed premium increase of 20.6 percent reduced to only 9.1 percent, reported Buffalo Business First.